Are Paid Video Ads Truly Effective in 2023?

February 24th, 2023  |  by amaliehluthra

Are Paid Video Ads Truly Effective in 2023?

Video is the future, there is no doubt about it. It’s a crucial part of consumers’ lives, not just for their entertainment and leisure, but also for presenting them with useful information about products or services they may be considering. 

While people love video, specifically video-focused platforms like YouTube, the question remains whether it’s worth businesses investing in video advertising. Digital video ads present incredible opportunities to increase brand awareness, drive engagement and grow a company. YouTube, now the second most popular social network as of 2023, has effectively overtaken the television advertising market. 

As YouTube now has in excess of 2.56 billion monthly users, with over a billion hours of video content consumed every day, it’s no wonder why many businesses allocate their marketing budget to video ads. But in a competitive world, many wonder whether it’s truly worth the hassle, time and investment.  The short answer is that YouTube advertising can work provided you tackle it correctly

This article offers the essential advice you need to get started with paid video advertising campaigns.

Types of paid video advertising

Video advertising is unique for each platform. They all use a PPC (pay-per-click) model, where you only pay for a view if the user watches the entire video. YouTube video advertising is the most transparent and diverse type of video marketing model, offering a range of ways that you can advertise.

Video display ads

Display ads will typically appear alongside the featured video and above the video suggestion list. YouTube display ads can run on multiple areas of YouTube, apart from the homepage. 

TrueView skippable video ads

Also known as in-stream video ads, these advertisements allow viewers to skip the ad after five seconds if desired. These ads can be placed before, during, or after the video they are pasted on. Advertisers are not charged if a user skips the ad. 

Non-skippable video ads

Similarly to the skippable YouTube ads, these can appear before, during, or after the main video, but cannot be skipped. They can span up to 30 seconds in length. When a viewer watches this ad, the advertiser must pay.

Bumper ads

YouTube bumper ads are a specific type of non-skippable video ad, but only lasting 5-7 seconds. These ads cannot be skipped and also reduce engagement time significantly.

Overlay ads

YouTube overlay ads appear on the lower portion of a video (the bottom 20%) that’s only being watched on a desktop or laptop. They do not appear on mobile devices. Viewers can close the ad at any time.

Benefits of YouTube Advertising

A YouTube video advertising campaign comes with numerous advantages, giving it an edge over using video to advertise on other platforms like Facebook, LinkedIn, Twitter, Instagram or Google. 

Here are just some of the benefits of YouTube ads:

  • Cost-effective - You can set variable monthly budgets and maximum spending to make video ads as cost-efficient as they need to be. Companies can retain complete control over how much they spend per appearance or click, allowing them to set more attainable goals.
  • Broader and more targeted audience - Paid video ads are three times more likely to engage digital audiences. meaning businesses can reach more people than they thought possible. Furthermore, YouTube content can be optimised for your specific commercial needs. With its built-in targeting options, companies can target videos by keyword, category, topic, or even audience behaviours, demographics or interests. 
  • Creative freedom - YouTube video ads give companies more flexibility and creativity when advertising. There is the option to keep it simple and stick to whiteboard animation or face-to-camera video content to advertise. Alternatively, investment can be placed in outsourced professional video production services involving actors, products in-action or deep reviews, among others. The choices are endless.
  • Improved click-through and conversion rates - Video ads drive more clicks and conversions than PPC display ads and image ads on Facebook or Instagram. They might take longer to curate, but the improved clicks, leads and conversions can be worth the investment alone.
  • Higher engagement - Video ads are attention-grabbing, using sound and movement to convey a message. Image or text ads rely on the user paying more attention, while video ads are better at piquing audience interests, allowing you to deliver your persuasive message or narrative in a captivating and engaging way. Statistically, videos have a 25% higher impression rate than static ads.
  • Easily shareable - Video ads on YouTube are concise, succinct and relatable, which makes them more shareable. If the narrative is engaging enough and viewers emotionally connect, they are more inclined to share the content with their networks or followers.
  • Built-in analytics - YouTube has immersive ad analytics that allows you to learn so much about your viewers and gain insights into how well your campaigns are performing. By tracking views, clicks, engagement and impressions, you can adjust your campaign to drive better results. 

How Much Do Paid Video Ads Cost?

There is no universal figure for the costs of YouTube advertising because ‌pricing depends on several variable factors. 

Marketers wrongly assume that YouTube advertising costs are always through the roof, but the bidding process has a significant impact. This, along with the type of video ad you choose, will directly affect your ad costs, but it’s important to remember that you can set a daily budget so you won’t pay more than a set amount. 

Understanding Whether Your YouTube Ads are Working

When deciding whether video marketing is worth the investment, the most important thing you can do is assess your campaign performance. You can measure numerous metrics within analytics, such as:

  • Views
  • Clicks
  • Viewership
  • Conversions

It might be premature to say that your first video marketing campaign will be immediately successful. Equally, it is also unwise to suggest that it won’t ever work for you. The only way you’ll truly know how well it’s performing is to measure and analyse your campaign’s performance.

How to Make YouTube Ads Work for You

Video is one the most effective and popular lead-generation methods, achieving high levels of engagement and return on investment (ROI). Can it work for your business? It depends on a few factors, such as what your business does and what content you have created (or plan to create). It’s also crucial to ensure that your content aligns with your advertising goals.. 

If you have an idea in mind, consider the following:

  • Professionalism of video content - Remember that cheap and cheerful doesn’t always work. Think about what you’re trying to promote, how video can make your product or service really shine and the content required to exemplify that.
  • Advertising budget - Some products monetise more effectively than others in video ads. You may not always make a huge return on ad income alone, but if you have a high price point per product, you may see better profit margins with eCommerce website sales. Consider what you want to drive and let that dictate how much you spend per ad.
  • Leads - YouTube is an excellent platform for generating leads, even if it does take time before the prospects start coming in. Many marketers fail to realise that posting a video ad does not suddenly lead to a plethora of leads. Sometimes it boils down to prioritising other elements in your marketing strategies, such as building a following or creating specific landing pages.
  • Content promotion - Many successful ads engage and resonate with people. If you’re considering investing in video creation and production, consider whether your audience is likely to enjoy, remember and take action on your content enough to make the higher investment worthwhile. 

If you believe that you can benefit from YouTube ads, but want some final tips on how to make your efforts more effective, consider the below. 

  • Grab your audience’s attention instantly. Statistically speaking, viewers’ attention span is eight seconds, so you need to make those first few seconds count.
  • Upload transcripts to your videos. While this is time-consuming, it’s worth noting that YouTube won’t specifically know what your video is about. It’ll also help your video rank for more relevant search terms.
  • Choose the right ad format. There are many ad formats available, so you may need to A/B test several types before you find the one that is most effective for your business. This will require some patience and commitment in both content type and ad placement.
  • Make your ads interactive. You can add interactive elements to your videos, which can make your calls-to-action (CTAs) more effective. These can include buttons, showcase cards, related videos, timestamps, YouTube cards, and others.
  • Create high-quality thumbnails. The YouTube video thumbnail is typically the first thing that users will see, so make sure it’s relevant to the context of your video. High-quality and branded video thumbnail images typically drive more clicks on videos. 

Remember that YouTube marketing is not a race. It takes time to create videos and get them in front of your audience, much less one that’s constantly engaged and wanting more. However, it’s clear to see why it can be an excellent and value-for-money investment. Paid video ads are worth it, provided you have created a workable strategy, backed up by insights and research, and you aren’t afraid of making mistakes. 


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